SENATE SPEED: The full Senate is preparing to vote on the Tax Cuts and Jobs Act the week after Thanksgiving, leaving them a week to address the looming threat to fund the government, with the continuing resolution expiring on December 8th. This deadline was one of the largest hurdles on the tax calendar, but if Republicans are able to pass a tax bill before that week, the appropriations fight might not push tax reform into 2018. There is still a lot of work to be done on the tax front - the Finance Committee is expected to vote Friday with over 350 amendments to consider before then and still has to address special budget rules the bill breaks. Everyone is making sure to get their proposals in - expect Democrats to introduce bills that make Republicans look as though they’re voting against the middle class, conservatives to try and ensure no one has a tax hike, and Chair Orrin Hatch (R-UT) to push Rothification.
WHIP IT GOOD: Speaker Paul Ryan and House Majority Whip Steve Scalise (R-LA) are spending most of their time these days on counting votes. They are going to use the House Rules Committee to solve what ever math problems come up for the tax bill. The Committee can change text without an amendment - and solve budgeting issues for fiscal hawks, dial the SALT personal property deduction provision up or down, and even include repealing the Obamacare mandate - which House Ways and Means Chair Kevin Brady (R-TX) says is still on the table. More tweaks to come before the full vote Thursday, but leadership seems confident they have 218 votes.
THE TRUMP EFFECT: President Trump‘s 11-day tour of Asia could not have come at a better time for Congressional Republicans who were able to carry out some fast and steady work over the past two weeks without distractions. However, Trump decided to voice his opinions on tax reform on Twitter and will be back tomorrow with Republicans on and off Capitol Hill bracing themselves for potential broadsides to their relatively smooth rollout. He is planning a visit to Capitol Hill to meet with House Republicans after tweeting that they should include the Obamacare mandate repeal and lower taxes for the top group to 35%. Trump’s biggest priority has consistently been a lower corporate rate and middle-class tax relief and we believe he will compromise elsewhere to make sure it happens.
DODD-FRANKENSTEIN: The financial regulation legislation Democrats passed after the financial crisis continues to lurk in the halls of Congress. Republicans have been trying to repeal Dodd-Frank all year, but the House-passed Choice Act wasn’t even touched in the Senate - until yesterday - when a bipartisan effort led by moderate Democrats like Heidi Heitkamp (D-ND) resulted in a deal to loosen regulations. Rank-and-file members of the Senate Banking Committee announced what Chairman Mike Crapo (R-ID) and ranking member Sherrod Brown (D-OH) have been wanting - revisions to Dodd-Frank that would higher the SIFI threshold from 50B to 250B, expand access to mortgages, limit credit report collections and lift regulations on community banks.
MOVING ON WITHOUT YOU: Since Trump pulled out of the Trans-Pacific Partnership, the other 11 countries are moving on with a multinational trade deal of their own. The new deal titled the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is in its beginning stages. According to Canadian Prime Minister Justin Trudeau, they have a lot more to negotiate before signing a deal. So far it looks like the agreement suspends at least 20 provisions former President Obama negotiated and adds in provisions the U.S. wouldn’t agree to including: a commitment on coal, changes to state-owned enterprises, a dispute settlement on specific trade sanctions, and a cultural issue related to Canada.
CALL INVITE: UPDATE FROM THE FORMER U.S./UN COMMANDER IN KOREA: On the heels of President’s Trump trip to Asia, our Senior Defense Analyst Emo Gardner invites you to join us on Thursday, 16 November at 10 AM ET to hear the four-star former commander of U.S./UN forces in Korea provide an up to date assessment. Get the details here.
EVENT: HEDGEYE AT OPEC – JOIN US FOR A PANEL & RECEPTION IN VIENNA ON OPEC’S NEXT STEPS: Our Senior Energy Analyst Joe McMonigle is hosting a panel in Vienna on November 29th on OPEC’s next steps, geopolitical risks and oil markets. Get the details here.
GENERAL DAN CHRISTMAN: TRUMP AND CHINA'S NEW LEADERSHIP: TO THE FUTURE AND BEYOND!: Our Senior Advisor General Dan Christman writes that President Trump’s two-day visit to Beijing last week was, as expected, high on pomp, but low on substantive deliveries. Read the full piece here.
DOJ PLAYS HARDBALL WITH AT&T/TIME WARNER: Our Senior Telecom Analyst Paul Glenchur writes that AT&T looks ready for a court battle if necessary; we still expect the deal to close despite timing uncertainty. Read the full piece here.
NECESSARY BUT NOT SUFFICIENT: CONGRESS AUTHORIZES 10% PENTAGON BOOST BUT HAS NO BUDGET: Our Senior Defense Analyst Emo Gardner writes that the Senate/House agreement to authorize $700B for Pentagon in FY18 makes all boats float, but exceeds BCA cap by up to ~$85B. Read the full piece here.
CALL REPLAY | TAX UPDATE WITH DAVID HOPPE ON HOUSE + SENATE BILLS: Macro Policy Analyst JT Taylor and Health Policy Analyst Emily Evans held a conference call with Speaker Ryan’s former Chief of Staff on the tax bills. If you missed it, get the replay details here and stay tuned for more of our tax call series as the legislation advances in both chambers this week.
